Tech Mahindra looks to automate its future earnings

The IT services company, which is part of the Mahindra Group, has been working on creating its automation framework AQT and its own artificial intelligence engine TACTiX.Jochelle Mendonca | ET Bureau | September 01, 2017, 08:47 IST

NEW DELHI: Tech Mahindra is expanding the share of business it can target both within a particular client and cross customers with its use of automation pilots and its in-built automation platform, the company’s chief technology officer told ET.

The IT services company, which is part of the Mahindra Group, has been working on creating its automation framework AQT and its own artificial intelligence engine TACTiX over the past two years. It has begun to see benefits from its investments.

“In one automation pilot, in SAP One, we were able to show significant efficiency increases... The whole portfolio, which is now seven-toeight times what we used to do for the client, is now open to us... On one side the business opportunity is increasing.

And we can go and repeat this for 10 customers,” Atul Kunwar, CTO at Tech Mahindra, told ET.

Kunwar said the company had initially focused on using automation to improve operations internally, but is now seeing a wider usage.

“Automation helps us serve our existing customers better and also helps us find new prospects.”

Despite the increasing role for automation, Kunwar said that employees who have experience in automation projects need not fear because they can be deployed in other automation implementations.

“When you look at the decrease in headcount, you’re just looking at it from one project. But when you look at in terms of all the other projects at the customer that you can target, and all similar projects across customers, the requirement for people with that calibre increases,” Kunwar said.

In the first-quarter of FY18, three of top five IT companies employed fewer employees than they did at the end of FY17. Tech Mahindra’s headcount dropped by over 1,700 in the same period. Cognizant saw the steepest drop, employing over 4,000 fewer people.

Analysts have said IT companies need to automate in order to bolster their margins against the compression due to the commoditisation of their major offerings. Tech Mahindra’s own operating margin is now under 13% as it deals with issues related to its mergers in the past two years.

Kunwar added that Tech Mahindra was also in the initial stages of boosting its training programmes to create more employees with specialities needed to truly become experts at digital technologies.

“The basic training on digital is being given to everybody. But to truly become experts you need a deeper range of training and project experience. We have three levels of training so far, we are now working on creating the fourth-level,” Kunwar said.